When running a business, every shilling counts especially when it comes to VAT. While VAT on many business expenses is claimable, VAT law also draws a firm line on certain items. These are expenses where, no matter how tempting, you simply cannot deduct the input tax unless they are strictly stock-in-trade.
Let us break it down in a way that makes sense
1. Passenger Vehicle Repairs (With One Exception!)
Repairs and servicing for passenger cars and minibuses are generally not claimable.
But, if your core business is repairing vehicles like a garage or auto workshop, then these become deductible because they are part of your taxable supplies.
2. Hiring or Leasing Passenger Vehicles and Minibuses
Thinking of hiring a car for business errands?
Great but remember: VAT on leasing or hiring passenger vehicles cannot be claimed, unless your business itself leases out vehicles.
3. Alcohol, Soft Drinks & Beverages
Whether it is liqueurs, cocktails, sodas, or energy drinks, these are considered consumable, not business inputs.
VAT on them stays with you no refund coming.
4. Entertainment Services
VAT on entertainment is blocked across the board.
5. Restaurant Services
Taking clients out for lunch may help close deals, but it does not help reduce your VAT bill.
Restaurant expenses fall under non-deductible input tax.
6. Returnable Bottles, Crates & Containers
Businesses dealing in beverages know this well: Returnable packaging like crates, bottles, and similar containers don’t qualify for VAT deduction.
7. Passenger Vehicles and Minibuses
Buying a passenger car for the company?
VAT on passenger vehicles is not deductible unless your business is literally about hiring or leasing them.
8. Household & Domestic Electrical Appliances
Items like microwaves, kettles, fridges, or TVs that are meant for domestic use.
Even if used at the office, VAT on such items is non-deductible.
9. Furniture & Decorative Fittings
Fancy decor, ornaments, office aesthetics are attractive, but tax-wise?
Non-deductible, unless: they are permanently fixed to a building, or used in hotels or restaurants and approved by the Commissioner.
Not all business expenses are created equally, especially in the eyes of the VAT laws. Knowing which input taxes are deductible and which are not helps you stay compliant, plan better, and avoid unnecessary losses.
Thank you for reading this article. Have a fruitful day, won’t you!!!!!!